Tax Groups are a collection of Tax Rates that get attached to Menu Items. A Tax Group can hold one or more Tax Rates. This article explains how to create Tax Groups and Tax Rates and apply the groups to the correct Menu Items.
- How to Create a Tax Group
- Assign a Tax Group to an Item
- Mass Assign Tax Groups
- Tax Exclusive vs. Tax Inclusive Pricing
- How Do Taxes Get Applied on Discounted Orders?
- How Do Surcharges Get Applied on Discounted Orders?
How to Create a Tax Group
To create a Tax Group,
1. Navigate to Configuration > Order Adjustments > Taxes.
2. Click Create.
3. Enter a name for the Tax Group. (Optional: Enter a description.)
4. Then click Add Tax Rate.
Enter the following information:
- Tax Rate Name - The name of the Tax Rate. The best practice is to use unique names for each Tax Rate. Do not repeat the same Tax Rate name. The Sales Tax Summary Report uses this name to report the taxes collected.
- Receipt Label - The name that will appear on the receipt for that Tax Rate
Note: Be sure to make receipt labels unique. Using the same receipt label in multiple rates within a Tax Group results in the tax rates being grouped together under one amount on the receipt.
- Rate - The percentage of Tax added to the total
Repeat these steps as needed to add as many Tax Rates as you need within this Tax Group.
- Note: If you have different Tax Rates per item type such as Alcohol vs. Food Tax, create 2 separate Tax Groups each holding the respective rate.
Assign a Tax Group to a Menu Item
4. Click into the field to scroll the options or type the Tax Group and select it.
5. Save.
Mass Assign Tax Groups
1. Navigate to POS Manager > Menu Manager.
2. Select items by clicking the box next to their name.
3. Type the name of the Tax Group.
4. Save.
Tax Exclusive vs. Tax Inclusive Pricing
At the Menu level you will indicate whether your prices are Tax Exclusive or Tax Inclusive.
To create a new Menu or edit an existing Menu,
1. Navigate to POS Manager > Menu Manager.
Depending on your selection below, the system will apply the Tax Group (which holds the rates) differently to the menu item.
Tax Exclusive Menu - Prices on this type of menu do not include tax. Customers pay tax as an addition to the menu price and taxes are applied on the tender screen.
Tax Inclusive Menu: Prices on this type of menu will assume your taxes are included in the menu price, meaning, there will be no additional charge to customers for taxes outside of the listed menu price. Please see example above.
- Note: Clover Sport automatically adjusts your menu price to properly reduce your menu price (to adjust for your tax rate), calculate taxes, and sum those to equal your listed menu price.
How Do Taxes Get Applied on Discounted Orders?
To calculate the taxes for each line item, we use the value of the line items after discounts have been applied. Additionally, we have two different ways taxes can be applied, exclusive of price or inclusive.
Tax Exclusive
| Subtotal: | $100.00 |
| 10.5% Tax: | $10.50 |
| Total Due: | $110.50 |
After Discount:
| Subtotal: | $100.00 |
| 10.5% Tax (after 50% discount applied): | $5.25 |
| Discount 50% off of subtotal: | -$50.00 |
| Total Due: | $55.25 |
Tax Inclusive
Before Discount:
Item True Price is $100 - $9.50 = $90.5
| Subtotal: | $100.00 |
| 10.5% Tax (Included): | $9.50 |
| Total Due: | $100.00 |
After Discount:
| Subtotal: | $100.00 |
| 10.5% Tax (Included): | $4.75 |
| Discount 50% off | -$50.00 |
| Total Due: | $50.00 |
How Do Surcharges Get Applied on Discounted Orders?
Tax-Free Surcharges
To calculate the tax-free surcharges for each line item, we use the value of the line items before discounts have been applied. Additionally, we have two different ways taxes can be applied, exclusive of price or inclusive.
Tax Exclusive
| Subtotal: | $10.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax: | $1.00 |
| Total Due: | $12.00 |
After Discount:
| Subtotal: | $10.00 |
| Discount 50% off of subtotal: | -$5.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax (after 50% discount applied): | $.50 |
| Total Due: | $6.50 |
Tax Inclusive
Before Discount:
Item True Price is $10 - $0.91 = $9.09
| Subtotal: | $10.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax: | $0.91 |
| Total Due: | $11.00 |
After Discount:
| Subtotal: | $10.00 |
| Discount 50% off of subtotal: | -$5.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax (after 50% discount applied): | $.46 |
| Total Due: | $6.00 |
Taxed Surcharges
To calculate the taxed surcharges for each line item, we use the value of the line items before discounts have been applied. Taxes applied to surcharges are not affected by the discount. For example, a 10% tax applied to a surcharge of $1 will remain $0.10 before and after the discount.
Tax Exclusive
| Subtotal: | $10.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax: | $1.10 ($0.10 is from the $1.00 surcharge) |
| Total Due: | $12.10 |
After Discount:
| Subtotal: | $10.00 |
| Discount 50% off of subtotal: | -$5.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax (after 50% discount applied): | $.60 ($0.10 is from the $1.00 surcharge) |
| Total Due: | $6.60 |
Tax Inclusive
Before Discount:
Item True Price is $10 - $0.91 = $9.09
| Subtotal: | $10.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax: | $.91 |
| 10% Tax from Surcharge: | $0.10 ($0.10 from the $1.00 surcharge) |
| Total Due: | $11.10 |
After Discount:
| Subtotal: | $10.00 |
| Discount 50% off of subtotal: | -$5.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax (after 50% discount applied): | $.46 |
| 10% Tax from Surcharge: | $0.10 ($0.10 from the $1.00 surcharge) |
| Total Due: | $6.10 |